Using the Santa service as my product, I want to discuss how this product tracks along the product lifecycle.

Introduction Phase: From a very early age, the target audience (two little children) had quickly become loyal customers of the service due to heavy promotion of the Santa service by mum, dad, relatives and broader society. 

Growth Phase: The customer retention rate was high:  annual Santa photos, numerous shopping trips to visit Santa and take in all the Christmas sights, etc.  There was 100% loyalty in the product and repeat purchasing year on year.

Product maturity and Product Extension: The kids were reaching points of doubt and disbelief in Santa’s existence, however a few words of wisdom (or watching The Polar Express) were simply required to continue the repeat purchase and a boost in Santa product sales.  With this we were able to continue the product extension.  

At this point, the effort to retain these two loyal customers was still minimal.  Business overheads were low: no special bonuses, no discounted offers, no special videos. It was easy. You could say the returns (and profit) came easily.

Decline: The kids were reaching a point in their customer journey where their loyalty was wavering significantly.  I had underestimated my customers and where they were on the product lifecycle.  Sure, I knew at some point the lifecycle would end.  I had expected that I would need to have that difficult conversation where I had to communicate with my customers that the Santa service was ending.  Instead, I had neglected to totally stay at the forefront of understanding my customers. This is the point where my Santa business had finally failed.

Tip 3, Week 3: Is it a problem or a conflict?

Humans are good at solving problems.  If you look at the advances we have made with technology, medicine, aviation safety, etc, you can see that we really are quite clever at solving complex problems.  By ‘problem’ I mean the sort of thing that can be solved by thinking clearly (and sometimes creatively) about causes, effects, and solutions.

However, in running a business many of the difficult decisions that we have to make are not related to logical problems.  Those decisions relate to ‘conflicts’ or they relate to a problem that has been complicated by a conflict.  A conflict involves emotions, not logic. 

Think about some emotional conflicts you, or your staff, may experience in your work week:
“Those idiots just told us that our delivery is running late, yet again – I should never have trusted them”;
“Why haven’t you spoken to that customer and resolved their complaint yet?”;
“I told her that I would re-do the job and she is still unhappy”; 
“All those casual staff want to do is look at their phones rather than work.”

These comments are all hints that your business has emotional conflicts, not just logical problems. (You may have had an emotional conflict with a customer or staff member before reading this article).

Because most of us don’t want to be counsellors or UN peace negotiators, and we have no time or interest in ‘playing games’, we can often misread situations as straightforward problems that can be solved.  We skip over the importance of the associated emotional conflict and downplay the effect it is having on the issue.  And we can under estimate the effect of our own emotions on the quality of our decisions.

One of the most difficult type of conflicts to resolve is when somebody feels that their values (fairness, integrity, loyalty, honesty, transparency etc) have been ignored or stomped on.  Those values are the fuel that feeds the fire of our emotions.  We need to deliberately connect our values with the values of other people before we move on to trying to logically solve a problem. 

Here’s a tip:  When faced with a complex decision, see if you can spot the conflicts as well as the problems.  You can’t resolve other people’s emotional conflicts for them, but your chances of negotiating a successful outcome will be better if you can acknowledge and ‘speak to their values’ before speaking to their logical brain.

Want more info on resolving problems and conflicts, email Trent trent.moy@halide.com.au or comment below.  For more great tips, stay tuned for Tip 4 next week.

Tip 2, Week 2: Separate the facts from the assumptions in decision making

It sounds like an obvious thing to want our decisions to be based on facts rather than just assumptions.  But when you look at why jobs take longer than expected, business plans don’t go to plan, and misunderstandings happen with customers, it’s often because assumptions have been made in the decision making process.

Assumptions are powerful because they simplify the decision making process.  In some cases, making an assumption, or set of assumptions, might be a very sensible thing to do.  Some examples may be assuming the way your competitors price a piece of work or their final tender bid, assuming the expected working life of a particular piece of equipment, or making assumptions of how many wet weather days to allow in a contract.

The trick with using assumptions is to clearly ‘label’ the assumptions as assumptions.  In this way we won’t confuse them with facts.  The facts are unlikely to be completely wrong or to change, but my assumptions are less certain – I have to remain open to those assumptions being wrong or being corrected by better information down the track.  Ideally, I have to be on the lookout for how I can improve my assumptions.  And I need to be aware of the way in which customers, suppliers, staff, subbies and other people all have their own sets of assumptions.

Making a good decision sounds simple – you evaluate the problem, think of all the possible options and then pick the best option… and do it.  But as we know that’s harder than it looks.

Tip 1, Week 1: Recognise your gut-feel… then put it aside for the moment

When we are faced with decision making, most of us have a gut-feel or intuition about what to do.  Part of what we call ‘gut-feel’ is based on experience – we recognise prior patterns and remember what has worked and what has not.  It’s like our brain takes a shortcut and avoids over-analysing all the possible choices.

That’s handy when the risk of making a ‘bad’ decision is low, such as choosing a parking space that is in front of you or continuing to drive around looking for a better spot.  But we also use it when the risk is high:  Is that wire live?  Can I trust that person?  Should I go and see the doctor about that chest pain?  Is now the time to borrow more money?

Gut-feel is handy but good decision making requires more than just gut-feel:

• Firstly, we tend to remember when we got it right and forget when we got it wrong. It’s a bit like remembering your wins and forgetting your losses.  I am responsible for my wins, but other people or things are to blame for losses.  We like to think we are smarter than we really are.
• Secondly, gut-feel is easily influenced by our emotional ‘reading’ of a situation. Is someone being a smart-arse or are they trying to help?  Is that deal fair or is someone being ripped off?  Do I have time to deal with this now?  I have too much going on – I’ll make this decision later.
• Finally, gut-feel is a shortcut. Research into human thinking indicates that in a world where there is a pressure to make quick decisions and work fast, we use those shortcuts too often.  There are many situations where we need to slow down our thinking, perhaps talk to other people, and make a more balanced decision.

So, gut feel is useful and it is hard to make it go away.  But it can also lead us astray.

Here’s a tip:  When faced with important decision making, write down or make a quick voice recording of your gut feel… and then put it aside while you think about it a bit more carefully.  Doing this allows your brain to acknowledge your gut feel as an important part of making a decision.  It gives your brain permission or freedom to explore other options.  You can also do this when a group of people need to agree on a decision – get everybody to write down their gut-feel – before giving themselves permission to think of some other possibilities.

Want more info on gut-feel and decision making in business or life, contact Halide, email trent.moy@halide.com.au or comment below.  Better decision making can lead to a better business and marketing strategy.

For more great decision making tips, stay tuned for Tip 2 next week.